High expectations as big US tech names report earnings next week

Several technology bellwethers will take the spotlight next week as investors look to see whether the industry can follow the upbeat start to earnings season posted by America’s banks.

Tech companies account for 22 per cent of S&P 500 market value, by far the highest of the 11 major sectors on the benchmark index, FactSet data show. The group has led US stocks higher this year, with gains of 12 per cent, which is more than double that of the S&P 500, although it has stalled since the end of last month.

Analysts are bullish on tech: the blended forecast for earnings growth in first quarter that includes expected and reported results sits at 13.7 per cent, up from 10 per cent in the final three months of 2016.

IBM, the more than century-old company that is in the process of turning its business around, represents a case study in Wall Street’s wrath if results disappoint, however.

Big Blue this week faced its worst day in almost a year after it recorded a steeper than expected fall in quarterly sales and worried some analysts with a slip in profit margin.

Alphabet and Microsoft, which each command market values of greater than half-a-trillion dollars, are slated to report on Thursday, along with chipmaker Intel. Apple, the world’s biggest company by market cap, and social media heavyweight Facebook are on deck the following week.

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